CRK: Excellent Value

FORBES GEMMELL, Raymond James (05/19/2010)
"Crocodile lowered its production guidance and increased its cost guidance for 2010. On the back of this, we have made modest downward revisions to our NAV estimate, which takes our target price from $3.00 to $2.70. Although not a positive development, the startup issues to date appear to relate to the milling facilities rather than the quality of the gold deposits (mining rates and grades have tracked largely inline with expectations). We continue to view 2010 as a transitional year for Crocodile with cost pressures easing once Cosmo comes online and the construction of the new mill is complete. We believe the stock represents excellent value at current levels—we reiterate our OUTPERFORM rating."

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